The Story of Official Development Assistance

GENERAL DISTRIBUTION OCDE/GD(94)67 THE STORY OF OFFICIAL DEVELOPMENT ASSISTANCE A HISTORY OF THE DEVELOPMENT ASSISTANCE COMMITTEE AND THE DEVELOPMENT CO-OPERATION DIRECTORATE IN DATES, NAMES AND FIGURES by Helmut FÜHRER ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Paris 1996 014644 COMPLETE DOCUMENT AVAILABLE ON OLIS IN ITS ORIGINAL FORMAT This paper was prepared by Mr. Helmut Führer, Director of the Development Co-operation Directorate from 1975 to 1993. It is made available on the responsibility of the Secretary-General of the OECD. Copyright OECD, 1994 2 THE STORY OF ODA: A HISTORY OF DAC/DCD IN DATES, NAMES AND FIGURES On the eve of my departure on retirement after some 33 years of work in the service of the OECD Development Assistance Committee -- since 1975 as DCD Director -- I naturally ask myself: What was done over all these years and was it worth it? Rather than burdening the system with subjective impressions and reminiscences, I felt that it would be more sensible for me to leave behind an objective, matter of fact account of the DAC's activities and the related institutional and policy developments. This may even be of some use for the coming generation of DAC Delegates and DCD staff. This factual account also gave me an opportunity to "name the names" of at least some of the many people who contributed to DAC - in Delegations and in the Secretariat, in particular the Chairmen: James Riddleberger (1961-62), Williard Thorp (1963-66), Ed Martin (1967-73), Maurice Williams (1974-78), John Lewis (1979-81), Rud Poats (1982-85), Joe Wheeler (1986-90) and Ray Love (from 1991); and my predecessors as Directors: Sherwood Fine (1961-65), Bill Parsons (1966-69) and André Vincent (1969-75); and Richard Carey, Deputy Director since 1980. I began this chronology some ten years ago for a contribution to the German Handbuch der Finanzwissenschaften. Much further work was done in connection with the DAC Review of Twenty-Five Years of Development Co-operation in 1985, with subsequent updating. This account would not have been possible without the extraordinary DCD documentation system run by Irène Botcharoff and Camille Bernaut, contributions from many DCD colleagues (with special thanks to Walter Schwendenwein and Cornelia Weevers) and the unfailing efficiency and patience of my secretary Ann Couderc. Together with the excerpts from central DAC documents and some key statistics, which were provided by Bevan Stein and Sigismund Niebel, this account gives, I believe, a rather precise "radioscopie" or at least a "table of contents" of the DAC and its evolution and indeed of the story of ODA more generally. Because, whatever one's view of the real impact of DAC, it has accompanied, monitored, explained, and fostered the ODA process from the beginning, in all its phases and manifestations. Indeed, defining and refining the concept of ODA has been a central preoccupation of the DAC from the very first meetings of its predecessor, the DAG, until today when preparing a note on the ODA definition and the "DAC List" has kept me busy until my last days in office. The essence of DAC work has been brought together in Twenty-Five Years of Development Co-operation (in the 1985 Chairman's Report), in Development Co-operation in the 1990s (in the 1989 Chairman's Report) and, in particular, in the Development Assistance Manual. I sincerely hope that the Manual will have more than the usual one-day fly existence which is the customary fate of bureaucratic work and will remain a living working instrument in aid agencies and contribute to coherent approaches. Aid agencies, ODA and the DAC now enter in many respects a new phase with ever more serious budgetary constraints, with many new claimants for aid coming on the scene, with new types of global challenges calling for international co-operation and also, as a positive achievement, with some dynamic economies emerging from the status of developing countries. The DAC is responding to these challenges and will, I am sure, have a major role to play as a central body for monitoring international aid efforts. At the same time, I hope that the DAC will remain faithful to its basic mandate to contribute to help the poorer countries create decent conditions of life for their people. Helmut Führer, May 1993 3 A HISTORY OF DAC/DCD IN DATES, NAMES AND FIGURES EARLY DEVELOPMENT CO-OPERATION INITIATIVES PRECEDING DAC The establishment of the Development Assistance Committee (DAC) and Development Co-operation Directorate (DCD) of the OECD was an integral part of the creation of a network of national and international aid agencies and programmes and related institutions. The historical beginnings of official development assistance are the development activities of the colonial powers in their overseas territories, the institutions and programmes for economic co-operation created under United Nations auspices after the Second World War, the United States Point Four Programme and the large scale support for economic stability in the countries on the periphery of the Communist bloc of that era. The success of the Marshall Plan created considerable and perhaps excessive optimism about the prospects for helping poorer countries in quite different circumstances through external assistance. The dates below show essential developments preceding the establishment of DAC. 1944 The United Nations Monetary and Financial Conference at Bretton Woods, New Hampshire, USA, convened by the 44 Allied Nations, leads to the establishment of the International Bank for Reconstruction and Development (World Bank) and the International Monetary Fund (IMF). 1945 Representatives of 50 countries draw up the UN Charter at the United Nations Conference in San Francisco. The Preamble to the Charter expresses the determination of the peoples of the United Nations "to promote social progress and better standards of life in larger freedom" and "to employ international machinery for the promotion of the economic and social advancement of all peoples". The Food and Agriculture Organisation of the United Nations (FAO, Rome) is founded at a conference in Quebec. The United Kingdom reorganises its development assistance through the "Colonial Development and Welfare Act" (following previous acts passed in 1929 and 1940). 1946 The International Labour Organisation (ILO, Geneva), established in 1919 under the Treaty of Versailles, becomes the first specialised agency associated with the United Nations. UN General Assembly creates the United Nations International Children's' Emergency Fund (UNICEF) and establishes the United Nations Educational, Scientific and Cultural Organisation (UNESCO, Paris). 4 World Bank and IMF start operating. The process of decolonisation starts with the independence of the Philippines. France establishes the "Fonds d'investissement économique et social des territoires d'outre-mer" (FIDES). 1947 India and Pakistan become independent. In his address at Harvard University (5 June), US Secretary of State George C. Marshall in the Truman Administration launches the idea of a US supported European recovery programme which "should be a joint one, agreed to by a number, if not all, European nations". The Marshall Plan combines massive aid to European countries with a framework of a co-operative, agreed, and responsible strategy of reconciliation and reconstruction, thus providing the impulse for a new approach to co-operation in policy-making. 1948 The recipients of Marshall Plan aid sign the Convention establishing the Organisation for European Economic Co-operation (OEEC, 16 April). The United States create the Economic Cooperation Agency (ECA) which manages the European Recovery Programme (ERP), 1948-51. The World Health Organisation (WHO, Geneva) is established. Sri Lanka (then Ceylon) becomes independent. In the United Kingdom, the Overseas Resources Development Act is passed setting up the Colonial Development Corporation. United Nations proclaim the Universal Declaration of Human Rights (elaborated in the UN Covenant of Economic, Social and Cultural Rights of 1966). 1949 President Truman proposes as "Point Four" of his Inaugural Presidential Address a programme for development assistance. The "Act for International Development", adopted by the Congress in 1950, allows implementation of the Point Four Programme. The UN set up the Expanded Programme of Technical Assistance (EPTA). 5 OEEC establishes an Overseas Territories Committee, consisting of Belgium, France, the Netherlands, Portugal and the United Kingdom, empowered to carry out surveys relating to the economic and social development of the Overseas Territories. 1950 Indonesia becomes independent. The Commonwealth initiates the Colombo Plan ("Council for Technical Co-operation in South and South-East Asia"). The Plan has seven founding members: India, Pakistan and Ceylon as regional members and Australia, Canada, New Zealand and the United Kingdom as donor countries. The United States join the Plan in 1951 and Japan in 1954. Outbreak of the Korean War. 1951 The UN publish the so-called "Lewis Report": Measures for the Economic Development of Under-developed Countries, which proposes the establishment of a Special United Nations Fund for Economic Development (mainly to improve public services) and an International Finance Corporation (to make equity investments and to lend to private undertakings). 1952 The new legal basis for United States aid is embodied, until 1961, in the "Mutual Security Act", providing for major aid programmes for South Korea and Taiwan (Formosa), Viet Nam, the Philippines, Thailand, India, Iran, Jordan and Pakistan. The aid programme is administered by the Mutual Security Agency (MSA) created through the transformation of the Economic Cooperation Agency (ECA) which administered Marshall Plan aid. Agreement between the Federal Republic of Germany and Israel on indemnification payments of DM 3.5 billion in kind and in cash in compensation for injustices committed against Jews under the Nazi regime. 1954 In the United States Public Law 480 lays the legal basis for the food aid programme. 1955 At the Afro-Asian Conference in Bandung (Indonesia) the non-alignment concept is initiated.

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